Citigroup Cutting 11,000 Jobs, Taking $1.1 Billion In Charges

Saying it needs to "further reduce expenses and improve efficiency across the company," Citigroup announced today that it is eliminating about 11,000 jobs — 4 percent of its global workforce.

The banking giant also said it is expects to take "pre-tax charges of approximately $1 billion in the fourth quarter of 2012 and approximately $100 million of related charges in the first half of 2013."

Bloomberg News points out that new Citigroup CEO Michael Corbat "is adding to a January cost-cutting announcement by predecessor Vikram Pandit, who had previously sought to boost some of the businesses targeted today. The new CEO is responding to an industrywide slump in trading and investment banking, stiffer capital requirements and Europe's debt crisis. Goldman Sachs Group Inc., Morgan Stanley and UBS AG are among rivals focused on reducing costs."

The New York Times' DealBook blog says that "under the reduction, 1,900 jobs will be eliminated in the institutional clients division. Another 6,200 positions will be removed from the bank's consumer banking business, along with 2,600 jobs in the operations and technology group."

"Citigroup has had a turbulent recent history, after teetering on the brink of collapse during the financial crisis and receiving a $45 billion lifeline from the federal government. After emerging from the financial crisis, it has been sharply reducing its expenses and trying to shed even more troubled assets in an effort to restore the bank to its past profitability.

"But those efforts have been dogged by missteps and turmoil. In March, for example, the Federal Reserve dealt a stunning blow to Citigroup when it scuttled the bank's plans to raise its dividend or increase share buybacks. Shortly afterward in April, the bank's shareholders, in a rare move, voted against a $15 million pay package for Mr. Pandit.

"Executives at Citigroup are still struggling to rein in the bank's business and work through a mass of bad assets in its Citi Holdings unit."